Zscaler IPO Timeline and Future Outlook

Zscaler's IPO journey began in 2018, with the company filing a confidential S-1 form with the SEC in July of that year.

The company's IPO was officially announced on February 25, 2019, marking a significant milestone in its growth.

Zscaler's IPO was priced at $9 per share, raising $192 million in its initial public offering, which took place on March 15, 2018.

Zscaler's IPO was a significant event in the tech industry, with the company raising $450 million in its initial public offering.

The IPO was priced at $20 per share, which was at the higher end of the expected range of $18 to $20 per share.

This successful IPO marked a major milestone for Zscaler, a company that provides cloud security and networking services to businesses.

Zscaler's IPO was also notable for its strong demand, with the company selling 22.5 million shares to investors.

The market opportunity for Zscaler's product suite is significant, with a Total Addressable Market (TAM) of $17.7B annually based on IDC data.

Their products span across a wide range of security markets, including URL filtering, anti-virus, content filtering, branch firewalls, advanced threat protection, sandboxing, and data loss prevention for outbound internet gateways.

Zscaler's market is certainly competitive given their breadth of products. They compete with legacy platform vendors like Symantec, Check Point, Fortinet, and Palo Alto.

Symantec is a fierce competitor, with Zscaler having a significant risk factor describing their legal proceedings with the company. In fiscal 2017, Zscaler had almost $6 million in litigation-related expenses.

Zscaler also competes with networking vendors like Cisco and Juniper, which adds to the complexity of their market.

Zscaler is growing rapidly, with ARR reaching $176M and a growth rate of 50%+ YoY.

Their financials show improving margins, despite still losing money. This suggests they're on the right track to becoming profitable.

They have a strong cash position, with $71.5M in cash on hand. This will help them fund their growth and expansion.

The company has raised $183M in funding, which implies they spent around $111M to reach their current ARR of $175M. This is a significant investment, but it's clear they're committed to growing their business.

Zscaler's payback periods are impressive, averaging 24 months over the past 9 quarters. This means they're generating revenue quickly and efficiently.

In the most recent quarter, their payback period was even shorter, at 20 months. This suggests they're continuing to improve their financial performance.

The average customer pays Zscaler $51K, up from $38K in July 2016. This represents a significant increase in revenue per customer.

Expansion is strong, with a 122% net dollar retention rate. This means customers are increasing their spend over time, which is a key indicator of a healthy and growing business.

Zscaler's ARR growth is also impressive, with $59.8M added over the past year. Last quarter alone, they added $20M in net new ARR.

Their implied ending ARR over the past 10 quarters shows a consistent and rapid growth rate. This is a key indicator of a company's financial health and potential for future growth.

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Zscaler has raised $183M to date from investors, including TPG, Lightspeed, and CapitalG (Google Capital).

The company's CEO, Jay Chaudhry, owns a significant stake of 25.5% pre-offering, while TPG holds an 8.7% stake.

Zscaler's last round was at a $943M pre-money valuation, which was led by TPG in August 2015.

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Zscaler is likely to trade more like a high-growth SaaS company given its nearly 100% cloud-based / subscription business model.

The company's valuation will be primarily based on its next-twelve-months revenue, as well as 2018 and 2019 calendar year revenue estimates.

Investors will be keen to know when Zscaler plans to reach profitability, which will be a key factor in determining the company's valuation.

Their last pre-money valuation was around $940 million, and it's expected to trade significantly higher after the first day's close.

Zscaler's cloud security TAM is still in the early innings, but the market is rapidly moving in their direction, which could make them a de-facto option for enterprises looking to secure applications in the cloud.

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Zscaler has raised $183M to date from investors including TPG, Lightspeed, CapitalG (Google Capital), Dell Technologies Capital, EMC Ventures and Sand Hill East.

The company's last round was led by TPG in August 2015, at a pre-money valuation of $943M.

TPG is a significant investor, holding an 8.7% pre-offering ownership stake.

The CEO, Jay Chaudhry, has a substantial ownership stake of 25.5% pre-offering.

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Zscaler's IPO journey began in 2020, with the company announcing its intention to go public.

Zscaler confidentially filed for an IPO in July 2020, but the exact date was not disclosed.

The company's IPO was officially announced on October 1, 2020, with Morgan Stanley, Goldman Sachs, and J.P. Morgan serving as lead underwriters.

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Zscaler had a significant cash reserve of $71.6 million, which will provide a financial cushion for growth.

This cash reserve, combined with the funds from its impending IPO, will give the company a substantial amount of capital to work with.

Zscaler's negative free cash flow of $13.5 million in its last two quarters might seem concerning, but it's not a major red flag, given its substantial cash reserves.